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Commission publishes Product Market Review 2013: Financing the real economy
This edition of DG ECFIN's biannual PMR focuses on the interaction between the real economy and the financial sector. It explores the extent to which the crisis in the financial sector casts a shadow on economic activity. (Includes link to Commissioner Barnier's speech.)
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Danièle Nouy appointed head of ECB supervisory board
The Council has appointed Danièle Nouy as the first ever chairperson of the supervisory board of the ECB. The ECB will have direct oversight of eurozone banks under the SSM, and will be responsible for the overall functioning of the SSM. (Includes Barnier/Draghi statements.)
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ECB/Draghi: Interview with Le Journal du Dimanche
Draghi said the crisis had shown that neither sustainable growth nor a fair distribution of prosperity could be generated by amassing debt. For now, the ECB had done all it could in its mandate to stimulate growth.
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FT: Bundesbank chief urges faster eurozone economic integration
Weidmann has pressed eurozone governments to accelerate economic integration ahead of this week's EU summit in Brussels, saying a lack of progress is hindering the task of the currency bloc's central bankers.
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ESM/Regling: Interview with El País
Regling said that as with OMTs, direct recapitalisation of banks should only be considered as a crisis resolution instrument. He also discussed future risks and the ESM's role in post-programme Spain.
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CEPS/Gros: The AQR and capital needs - Why recapitalise with public money? [prepared for ECON MD]
The assumption that any capital needs discovered by the ECB's AQR should be filled by public funding (= fiscal backstop) is wrong, says Gros. Banks with insufficient capital should be asked to obtain it from the market; or be restructured using the procedures and rules recently agreed.
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Bruegel: Ending uncertainty - Recapitalisation of banks supervised by the SSM [prepared for ECON MD]
There is considerable uncertainty about the quality of banks' balance sheets and the central parameters of the upcoming ECB stress-testing exercise, such as the treatment of sovereign debt and systemic risk. The ECB should communicate those parameters early to allow for private sector solutions.
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Bruegel/Wolff: Continued financial fragmentation will put ECB on the hook
An insufficient agreement at the ECOFIN and the European Council would put the ECB in an awkward situation and may force the ECB to engage in non-standard monetary policy measures to fulfil its mandate.
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Peterson/Kirkegaard: Europe's Cypriot solution for failing banks
The BRRD makes clear that the treatment of Cypriot banks earlier in 2013 set a precedent. A final round of negotiations among Member States and the EP will determine the design of the euro area's new single resolution mechanism for failing banks.
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CER/Collignon: Exit strategies and the impact on the euro area [prepared for ECON MD]
Unconventional monetary policies have been successful in preserving the financial system, but it is less clear to what extent they have supported the real economy.
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CEPR/de la Dehesa: Tapering and exiting from present monetary policies [prepared for ECON MD]
The ECB's task is to counter the adverse effect symmetric shocks stemming from the crisis as well as asymmetric shocks, chiefly related to fragmentation of financial markets along national borders. As a consequence, it will take longer for the euro area than for the US to recover from the crisis.
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CEPR/Crafts: The eurozone - If only it were the 1930s
Compared with struggling eurozone economies today, the economic situation in Europe in the later 1930s was in many ways more promising. This is particularly true of the aftermath of public debt and the difficulty of dealing with it.
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iMFdirect: International policy coordination - The Loch Ness Monster
International policy coordination is like the Loch Ness monster: much discussed but rarely seen. Going back over the decades, and even further in history to the period between the Great Wars, coordination efforts have been episodic.
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ECOFIN Council agrees general approach on Single Resolution Mechanism
The Council set out its position on the establishment of a single resolution board and a single fund for the resolution of banks. It called on the presidency to start negotiations with the EP, with the aim of agreeing the SRM regulation at first reading before May 2014.
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Commissioner Barnier's remarks at the ECOFIN Council press conference
"Today is a momentous day for Banking Union. A memorable day for Europe's financial sector. (...) Taxpayers will no longer foot the bill when banks make mistakes. We are ending the era of massive bailouts."
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ECON Committee: Single resolution system for struggling banks - MEPs adopt negotiating position
The Commission, acting as resolution authority, should be empowered to decide to wind down a bank in the Banking Union, says a draft law voted by the ECON Committee. Commissioner Barnier said the proposals formed a good basis, but he expressed a number of concerns.
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EP Groups comment on SRM / SBRF
ALDE, the EPP Group, S&Ds and Greens commented on the Single Resolution Mechanism and the Single Bank Resolution Fund. The EPP Group is opposed to watering down rules for failing banks.
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ECON Committee: Draghi allies with MEPs against a bad Banking Union
The EU Member States' current plans for a common system for winding down troubled banks risk being too complex to work, the ECB president told the ECON Committee.
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Comments on new banking sector rules: AFME, BBA, EBF
Overall, the finance industry has welcomed the EU's plans for dealing with troubled banks. However, the EBF remains somewhat concerned with regard to the demand for banks to build up, at Member State level, a separate ex-ante financed resolution fund of 1 per cent of covered deposits.
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ECON Committee: Deal reached on bank "bail-in directive"
Political agreement has been reached on the draft BRRD, the first step towards setting up an EU system to deal with struggling banks. This Directive will introduce the "bail-in" principle by January 2016, thereby ensuring that taxpayers will not be first in line to pay for bank failures.
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ECON Committee: EP and Council negotiators break depositor-taxpayer link
Savings deposits under €100,000 will finally be guaranteed by funds contributed by banks rather than the taxpayer, thanks to a political agreement struck by Parliament and Council negotiators. (Includes Barnier/Šadžius/Ferreira comments.)
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